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The project, to be built in the Fuyang region of China's Anhui Province, is expected to be undertaken as a joint venture with Guozhen.

Guozhen is a Chinese company that will supply straw biomass and use the resulting lignin as a by-product from the biorefinery to feed a 45-MW co-generation plant that will be constructed at the same time and site.

M&G will be a majority partner in the biorefinery and minority partner of the power plant.

The biorefinery will be based on Proesa technology licensed from the Beta Renewables joint venture of Mossi Ghisolfi Group's Biochemtex subsidiary, TPG and Novozymes. Enzymes needed for the project will be supplied by Novozymes.

Capital expenditures of about $500-million are anticipated for the project, which is expected to come on stream in mid-2015.

"This is the first act of a green revolution that M&G Chemicals is bringing to the polyester chain to provide environmental sustainability to both polyethylene terephthalate (PET) beverage packaging and polyester textile, explained M&G Chief Executive Marco Ghisolfi.

"The timing and scope of our green polyester revolution and our manufacturing entry in China from the green PET raw materials avenue is even more relevant considering The Coca-Cola Co. has announced plans to use PlantBottle packaging, which is partially made from plants, for all of their PET plastic bottles across the globe by 2020, Ghisolfi added.